"It's a revenue share venture where Kotak will hold 20% stake, while Akshaya will have the majority," said Chitti Babu , chairman and chief executive of Akshaya Homes.

In 2011, Kotak had engaged Mexican pre-fabricated affordable housing company Homex to develop the same land parcel for Rs 130 crore. The deal, however, did not get the necessary regulatory approvals. Kotak had acquired the land from Pentamedia Graphics in 2007 under the Reconstruction of Financial Assets and Enforcement of Security Interests Act.

Akshaya Homes plans to build 2,136 mid-income apartments on the plot with an average price of over Rs 3,000 per square feet. "The total investment in the project will be Rs 450 crore, excluding the land cost, and we are expecting revenue of Rs 750 crore from the proposed residential development," Babu said.

According to Venture Intelligence, private equity investment in the real estate sector slowed down in the first half of 2012. There have been 29 real estate investments worth $1.04 billion (about Rs 5,500 crore) this year, a 72% drop in cumulative deal value from 2011 that saw 87 deals worth $3.9 billion.

Kotak is in the process of raising Rs 1,866 crore through a foreign real estate fund to invest mainly in residential properties.